Experts: State Dept. unprepared to oversee contracting in Iraq

Nov. 8, 2011 - 06:58PM
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U.S. contractors oversee the delivery of vehicles in southern Iraq. Dov Zakheim, a former Pentagon comptroller and member of the Commission on Wartime Contracting in Iraq and Afghanistan, said the State Department is unprepared to take on oversight of contracting in Iraq. (AFP)

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At the end of the year, the State Department is set to take on more contracting oversight in Iraq than it has in any country — roughly 14,000 contractors.

And some experts question whether it can handle the task.

The possibility of waste, fraud and abuse occurring is a "huge risk," said Dov Zakheim, a former Pentagon comptroller and member of the Commission on Wartime Contracting in Iraq and Afghanistan, in an interview. "I would go so far as to say it's a likelihood."

The State Department is "not organized, structured or oriented to doing this sort of thing," he said, adding that some problems could be avoided if the Defense Department, as it draws down the military presence in Iraq, lends personnel to help out.

Zakheim discussed the State Department's contracting challenge last month at a hearing before the Senate Armed Services subcommittee on readiness and management support. The State Department, which was not represented at the hearing, said in a statement that contractors will be split evenly, with roughly 7,000 providing security and another 7,000 providing support such as medical services and construction. The number of State Department-funded security contractors, currently at its peak of about 2,500, will nearly triple.

The Defense Department declined to comment on whether it will aid the State Department in contracting oversight, but Frank Kendall, acting undersecretary of Defense for acquisition, technology and logistics, acknowledged the potential for problems during the hearing.

"I am sure there will be problems," he said. "The State Department has never done anything this big, even though they have got a reasonable amount of experience with smaller scale."

The State Department said it has worked with the Pentagon and carefully considered recommendations from various offices and committees as part of "intensive transition planning and implementation."

Under a comprehensive plan for contracting oversight, the department has, for example, increased the number of contracting management staff assigned to Iraq.

The unprecedented Defense Department contracting operations in Iraq — in which contractors at times outnumbered U.S. forces — has faced scrutiny over the years.

Reports in 2007 of widespread misconduct by the contractor Blackwater contributed in part to Congress' decision in 2008 to create the Commission on Wartime Contracting in Iraq and Afghanistan. The commission reported that up to $60 billion of $206 billion spent on contracting in Iraq and Afghanistan over 10 years was lost to waste, fraud and abuse.

Dan Goure, vice president of the conservative Lexington Institute, pointed out the risk of these problems recurring with State.

"They have never run anything of the complexity, size, number of contracts," he said in an interview. "We know how difficult it was ... for the Pentagon to handle the scale."

Goure also mentioned some potential positives, such as Iraq stabilizing and taking on some contracts itself.

Iraq "can hire Accenture, or whoever, just as easily as we can," he said. "This may be the start of a beautiful friendship."

New Hampshire Sen. Kelly Ayotte, senior Republican on the subcommittee, said she is concerned that what DoD learned will not be passed along to State.

"I would just hate to see us do this and then pour thousands — millions, billions, I don't know what the number would be — of taxpayer dollars there and have all these lessons just kind of fly out the window," she said.